Credit analyst praises Sault’s COVID vaccination success

S&P Global Ratings is applauding Sault Ste. Marie’s “relatively high” COVID-19 vaccination rate as one factor in keeping our municipal credit rating stable at AA.

The credit analyst also likes our low municipal debt and modest numbers of COVID cases.

But S&P Global is also warning we have “demographic challenges” limiting our growth prospects.

“The city has engaged S&P Global Ratings to provide an annual credit rating," says Shelley Schell the city's treasurer and chief financial officer.

"The rating is a forward-thinking opinion about creditworthiness. The rating score is based upon key factors such as economy, financial management, budgetary performance, liquidity and debt burden," Schell says in a report to be presented at tonight's City Council meeting.

"Low COVID-19 cases and relatively high vaccination rates have led to a smooth economic recovery," says this year's S&P update.

"We expect the city will produce strong operating margins as the near-term impacts of the pandemic subside."

"As COVID-19-related restrictions ease, we believe the city's main industries such as manufacturing and forestry will help bring economic activity back to pre-pandemic levels."

"However, the city continues to experience socioeconomic and geographic challenges that will inhibit potential economic growth. Sault Ste. Marie's limited exposure to the pandemic, access to provincial finding, and management's cost-curtailment strategies will help keep budgetary performance stable and healthy, on average."

"A very low debt burden and robust liquidity position will remain key credit strengths, in our view."

The credit analyst nonetheless warns: “Sault Ste. Marie’s challenging demographic profile limits the city’s growth prospects and might affect its revenue-generating capabilities.”

S&P says it will continue to monitor the Sault's efforts to wean itself from its longstanding resource-based economy and the success of the local rural and northern immigration pilot program.

Tonight's City Council meeting will be livestreamed on SooToday starting at 4:30 p.m.